Inc. reported an operating lease expense of $$100$ mm last year and EBIT of $$300$ mm last year. It has operating lease commitments of $$120$m$/$year for the next $10$ years.

a$.$ If the firm$$s cost of debt is $5\%,$ what is the debt value of the operating leases?

b$.$Estimate the adjusted operating income $($EBIT$)$ for last year, assuming that the operating leases are capitalized and that the depreciation on the underlying assets equals the difference